Welcome to Thoughts on the Market.

I'm Michael Zezis, Head of Public Policy Research and Municipal Strategy for Morgan Stanley.

Along with my colleagues bringing you a variety of perspectives, I'll be talking about the

intersection between U.S. Public Policy and Financial Markets.

It's Wednesday, July 28 at 10.30 a.m. in New York.

All week long, investors have been hanging on the headlines about the $600 billion bipartisan

infrastructure plan, the concern that talks could break down and the market might have to

adjust to lower economic growth expectations as a result.

We're not as worried.

In fact, by the time you hear this, the deal could have fallen apart or definitively

succeeded.

But we don't think that matters much.

While the successor failure of this bipartisan plan could be important for political reasons,

for investors we think it's mostly procedural noise on the way to eventual approval of

a spending plan that will total $4 trillion over 10 years.

Why?

Because congressional Democrats already have a plausible way to make sure the spending

plan is enacted.

With those bipartisan talks break down, Democratic leaders have already signaled they would

simply add that spending to their plan $3.5 trillion budget reconciliation bill, which

is eligible to pass the Senate with only the support of all 50 Democrats.

We think that's a viable strategy, as programs who spending totals up to that number are already

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